17 January 2009

East Timor officials 'took' $13.3 million

Mark Dodd | January 16, 2009 Article from: The Australian - AN urgent search is under way in East Timor for $13.3million that was allocated to various government ministries but is unaccounted for, amid growing corruption concerns.

News of the missing millions is a severe embarrassment to the Gusmao Government, which is heavily dependent on aid from the UN and foreign donors, of which Australia is one of its biggest.

The impoverished half-island state is one of Asia's poorest, with few developed natural resources and almost no industry.

Under questioning by the Fretilin opposition, Finance Minister Emilia Pires told parliament yesterday the East Timorese Government was trying to recover the money but had met with only limited success.

Fretilin spokesman and senior party official Jose Teixeira told The Australian the money had been taken by corrupt officials.

"They (the Government) have no hope of getting it back. They have lost control of finances, and public administration is far worse than we thought," he said. "How can any government justify to their taxpayers providing a huge aid program here when there is such wastage?"

In a letter written by Ms Pires to Prime Minister Xanana Gusmao last Friday, and obtained by The Australian, the minister expresses concern that much of the money has been misappropriated by corrupt officials.

"The National Treasury Directorate wrote to all ministries on 9 October (2008) to present their justification for expenses for which they received advances up until October 25," she wrote.

"By the 9th of January (2009), the total debt for all ministries was $US8.8 million. It is possible that some ministers have opened bank accounts in order to retain the money securely.

"The opening of such a bank account with any bank is expressly illegal."

In a second letter to the Portuguese BNU Bank dated January 9, Ms Pires indicates she is aware of several illegal bank accounts and orders them closed.

"Account No 4136469-10-001 should be immediately closed," she wrote. "The credit balance should be transferred immediately to government account CFET 2-3711.

"From hereon, public receipts should not be credited to the above-mentioned account."

The US and international corruption watchdog Transparency International have recently expressed concern at rising corruption in East Timor.

Six years ago, the national budget stood at just $124 million. But the Government is now dipping into its $3.9 billion petroleum fund, which is flush with oil and gas proceeds from the Timor Sea.

Last year's budget rocketed to $973million, with this year's budget set at $1.03 billion.

Australian aid for 2008-09 is worth almost $100 million.


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